What downturn? If you look at the latest market research from IDC, their white paper about China’s e-commerce industry states the trade volume of China’s e-commerce increased by about 20% in the year 2008.

The total trade scale of China’s e-commerce industry reached CNY1.951 trillion in 2008, increasing over 20% compared with the CNY1.608 trillion in 2007. Of this revenue, e-commerce that targeted individual consumers increased by about 30%. The report further points out that China’s e-commerce industry will maintain a rapid growth in the next five years and by 2010 its total trade is expected to reach CNY3.22 trillion.

Consistent with the expansion of e-commerce, the number of e-commerce merchants in China has also been growing. According to 2008 Chinese Internet Merchant Report, the number of frequent users of e-commerce in China increased from four million in 2004 to 35.5 million in 2007. IDC says although 2008 is a hard year for enterprises, the number of Chinese Internet merchant still grew to nearly 50 million and the number is expected to reach 100 million by 2012.

By the estimation of IDC, Chinese auction website Taobao.com, one of the largest Internet shopping platforms in China, realized over CNY100 billion trade volume in 2008. The company’s total trade volume in 2007 was CNY43.3 billion.

So what does this mean for 2009?…. At SinoTech Group we are also seeing a growing trend for e-commerce and a general acceptance from Internet users to head online and purchase goods. We are anticiapting an increase in the growth rate of the e-commerce sector and this is in the face of a global down turn…

As a very nice begin of the new year, SinoTech Group’s blog--—Digital Marketing Inner Circle (www.sinotechblog.com.cn) was announced to win the Best China Technology Blog Award with more than double the votes of the second contender.

China Blog Awards is held by Chinalyst (www.chinalyst.net), which is a home for over 200 English-language China blogs dealing with diverse China topics ,providing invaluable China information that cannot be found elsewhere. The China Blog Awards is an annual award which aims to recognize the best and most valuable blogs in each area.

SinoTech Group (www.sinotechgroup.com.cn)is the largest independent full service digital marketing company in China. Leading the thinking in digital marketing, SinoTech Group not only provides services to 4A’s, traditional agency’s and some select clients ,helps them to improve their online presence through advanced digital marketing technologies, digital strategy, search and social marketing as well as online media buying/planning & utilizing affiliate networks, but also share their views about the industry through a range of channels , the blog Digital Marketing Inner Circle is one of them.

SinoTech Group’s blog Digital Marketing Inner Circle, which attracts various groups of visitors with its latest Digital Marketing news, focuses more on Chinses Internet market. A professional group of SinoTech Group’s experts dedicate articles on it. With its valuable information and professional views, Digital Marketing Inner Circle is becoming an on-line community for industry players.

For winning this award, SinoTech Group Chairman & CEO Dr. Mathew McDougall says, SinoTech Group is honored to be given this prestigious praise. As a leading expert in the industry and with more than 18 years of professional experience in internet, wireless, new media, and software sectors, l also dedicates articles on the blog. Talking about the prospect of the on-line media industry in the new year, Dr. Mathew McDougall says, he is looking forward to the future, because 2009 is going to be another fascinating year of social and technological developments driven by ever changing digital communications. The Internet and mobile platforms are fundamentally changing the way individuals interact and how “Chinese society” at large leverage communities to wield significant power and influence. “Next year, I expect social networking, user-generated content, word of mouth, and video, wireless, advergaming to all have a major impact on our advertising industry.”

Dr. Mathew McDougall wants the blog Digital Marketing Inner Circle to continue acting as a place for industry information and a communication platform. “Better communication, greater cooperation.” Dr. Mathew McDougall hopes, there will be more and more people concerning the blog , and exploring new cooperation with SinoTech Group as well.

It is at this time of year when I am taking my vacation that I can sit back and reflect on the past year. This past 12 months for SinoTech Group has been our most exciting (in our short history) when thinking about where we started the year and where we finished it.

In terms of achievements, I am proud that we have attracted some of the brightest digital marketers in China. I know there will be some smiles from Lonnie and David as they too also think they have the ‘best and brightest’… but I really do see the talanted team we have. I talk about passion and ‘fire in the eyes’… when we hire and I have got just that … A CEO could not have a better motivated team… Much thanks to the exec’s at SinoTech that keep this all going. I guess the challenges for 2009 will be to continue to grow the middle management skills as we grow the number of staff… This level of leadership in my view is generally lacking in China.

If I think what was the most challenging projects we worked with in 2008, I guess it would come down to two; Zenith Optimedia who uses our Media Planning & Reporting platform and Sensis, who we did a complex digital consulting project. The challengers where different in each case; Zenith was tough given the timeframes of taking our media planning being used in China and deploying it throughout Zenith Optimedia in 13 countries. Sensis, was challenging because we were doing detailed financial modeling on a number of web sites and exploring new ways of increasing revenue - all this in a very short space of time.

The most rewarding partners to work with have been the folks at Publicitas and DMS. These are both highly professional organizations run by Moritz and Grant respectively.  All dealing with these companies have been done in a spirt of co-operation… Thanks guys.

So what did we learn from 2008? What has been the experiences for SinoTech Group?

Publishers:

1. Yet to embrace new ad revenue models (however some bright starts trying new approaches). Almost all still use a cost per day model (CPD)

2. Mostly resisting the move towards standard ad unit sizes (such as IAB)

3. The move towards using site analytics (mostly internally) but some now providing more metrics to agencies and advertisers

4. Pressure on vertical sites/shoulder properties to attract advertisers and increase sell through rates…. Tier one properties are holding steady or growing.

Advertisers/Agencies:

1. The trend for Media Agencies to do search, social and creative & Creative Agencies to move into doing search and social….. becoming harder to differientiate.

2. Consolidation brings oportunity

3. Global down turn brings opportunities- and pain

4. Global down turn also offers an out for many Brands looking to refocus and make change.

Final Thoughts… 2008 was a great year for SinoTech Group. We made some great progress commercially, had a lot of fun doing it and have the team to make 2009 even better.

Thanks for all the suporters of SinoTech Group….

Cheers and hope you have a great New Year!

Matt

Baidu.com Inc (NASDAQ: BIDU), the world’s largest Chinese language search engine, has begun a campaign to establish websites for half a million Chinese small- and medium-sized enterprises (SMEs) for free, CEO Li Yanhong said. “The global financial fiasco, in a sense, is an opportunity for SMEs to go online,” said Baidu vice president Shen Haoyu. “We are going to invest roughly RMB100 million in training SMEs with IT know-how so that they can be better prepared to weather economic hardship.” The Internet has become China’s largest trade platform after its cyber population rocketed 125 times to 253 million in 2007 from just 2 million a decade ago.

Source: http://www.sx.xinhuanet.com/rdsp/2008-12/14/content_15174232.htm

Baidu.com Inc (NASDAQ: BIDU), the largest Chinese language search engine, snatched an 86.2% share of all search engine hits among 100 million plus Chinese internet café users in October, iResearch figures show. China has over 130,000 registered internet cafés nationwide running over 12 million computers.

Alibaba.com, China’s largest online trading platform, launched its “Taobao City” yesterday in Hangzhou, the capital of Zhejiang province. The RMB1.3 billion project will be completed on 4 million square meters in 5 years and will employ 15,000 staff for R&D, customer service, website management, marketing campaign, technical support, partner incubation and training facilities. Further, Alisoft.com, a software provider under Alibaba, said Tuesday it will invest RMB100 million in its first “business cloud” center in Nanjing, the capital

Baidu this month announced its new advertising product called “Brand-Link” which will generate content based on brand-related search phrases. Brands that subscribe to this new product will expect to find their listings among news, product information and promotional announcements.

When a searcher runs a query on Baidu for a brand name or catchword of an offline ad, Brand Link will show at the top of the search result page with multiple lines of text/image and hyperlinks. Its size is 3 or 4 times bigger than the normal paidsearch ad. The BrandLink advertisement area is separated from the common search results by a horizontal line with picture advertisements on the right side of the page, providing a space for the display of products (see below).

This new search model combines various display methods, including words, pictures and videos, which can improve the search experience of Chinese netizens using the search engine. As Google introduces new search engine products I expect we wil see Baidu continue to as a way to differentiate and this will allow both search engines new ways to segment the advertising base to generate revenues. For Search Marketing companies like SinoTech Group, these new products offer their clients with a number of ways to promote using the engines.

Reportedly, Baidu has attracted brands such as Lenovo, Dell, Samsung, Mercedes-Benz and Audi in using the new BrandLink product on Baidu.

There is some very interesting news hitting the streets today. The Chinese blogosphere is heating up with the news that  Sina, one of the biggest Chinese portals have acquired Focus Media, a media company which operates the largest outdoor advertising network in China.

Focus Media delivers advertisements using LCD televisions located at the elevator waiting area of business and commercial building, and it also owns the largest Chinese Internet advertising agency Allyes. The deal is reported worthy of around $1 billion and the detail is expected to be disclosed later tonight.

I expect over the next few days we will get much more information coming out about the deal and the impact we will see in the Internet advertising space… also I guess speculation about the size of the purchase- reportedly $1 Billion…  Anybody know more about this deal?

Many International advertisers have yet to realise that China’s most dominate Search Engine is Baidu. Many of our clients we work with from the US or Europe automatically assume that Google is the number one ranked engine and want keyword management and support for just this single engine. It is further complicated for the International advertsiers in working with Baidu directly in that the payments are in RMB (yuans).

Currently, Baidu’s initial advertising budget for new accounts is RMB5,000. The “consulting” fee remains the same, RMB600. Therefore, new advertisers therefore are required to pay RMB5,600 (about USD824) upfront to set up a new pay-per-click account.

As a comparison Google account opening fee stands at RMB50.

If you already have an advertising account with Baidu, you have two main options to add funds to your pay per click account:

1-Bank transfer to the local Baidu branch through which your account was opened (payment through the post is also possible)

2-Online transfer directly through your Baidu account (Baidu has a direct gateway through China Merchant Bank, or through 99 Bill, 快钱 in Chinese, which supports a certain number of domestic debit cards).

In both cases, payments are to be made in RMB (Chinese Yuans) only. International credit cards are not supported so far. Minimum amount when adding funds to the Baidu account is 1,000 yuans (as compared to 100 yuans for Google Adwords in China).

Given this requirement for RMB, International clients in most cases will need to go through a China-based agent to add funds to their Baidu account. SinoTech Group provides this service. You simply need to wire the account in foreign currency to our Hong Kong or Beijing bank account and the payment will be applied to your account within 5 business days.

Don’t hesitate to contact us for further information and happy PPC advertising in China…

Another interesting development in the Chinese Internet landscape where Youku.com has started to block the video search of Baidu and Google. This follows the Chinese online auction and e-commerce website Taobao.com which starting blocking the search engines of Baidu, Google and Yahoo back in September of this year.

The Internet site China Tech News reported that videos from Youku.com cannot be found in Baidu’s video
search results and the number of Youku.com’s videos in Google’s video search results has been greatly reduced.

Youku.com told local media that the company has a good relationship with Baidu and the strategic cooperation between the two companies is successful. In terms of the self-development plans of Youku.com, the company has been committed to optimizing its contents, structure and user resources. At present, Youku.com has a large user group and the company need to protect the video experience of users who directly visit its website, because the loyalty and value of these users are relatively higher than those who search videos via search engines.

But different voices on chat boards say that Youku.com’s block of video searches is a way to reduce traffic, so as to cut its costs to ease the financial pressure and deal with the financial crisis.

In June 2007, Youku.com achieved a strategic cooperation with Baidu.com and placed its links on the pages of Baidu, but the cooperation has ended. Youku.com’s competitor Ku6.com also cooperates with Baidu in the same way.